State film incentive program gets plaudits, but also has critics

With states across the country facing budget deficits and some looking at slashing their film incentive programs, Alaska might have an opportunity to bring more of the high-profile business here.

State Sen. Johnny Ellis, D-Anchorage, thought that when he shepherded Alaska’s film incentive program through the Legislature and into state law a few years ago.

“We need to do more to diversify our economy and bring people and jobs here,” he said.

The reality show business is booming in Alaska these days, with the granddaddy of the Alaska shows, “Deadliest Catch” still going strong. At the same time, truckers, miners, pilots and others all have their own shows.

The reality/documentary show “Tougher in Alaska” even came to Juneau to cover Alaska Electric Light & Power’s battle to reconnect the city to its hydroelectric plant following massive avalanches.

Under the film credit program, production companies in Alaska can get a base 30 percent transferable tax credit, which can rise as high as 44 percent depending upon other incentives such as local hire and rural development.

The incentive program began as a trial effort, but Ellis said it has proved itself and needs to be renewed.

That effort has run into some legislative opposition, however.

Several Republican legislators have warned that the film incentive program might bring Alaska unwanted attention.

“I’m very concerned about film credits being used by people to shut down Alaska and resource development,” said Rep. Anna Fairclough, R-Anchorage, during legislative debate as the bill stalled in the House Finance Committee last session.

The likely source of concern: Liberal actor Ted Danson, in Alaska for the production of “Everybody Loves Whales,” one of the films seeking the credits.

Legislators questioned whether they state has the ability to censor the films it backed. State officials said they review scripts prior to awarding the credits, but were unclear about what role that played in their approval decisions.

Ellis acknowledged that Danson had made anti-offshore oil drilling comments in Alaska, but said that was no different that right-wing actor Jon Voight’s comments in Alaska in praise of Sarah Palin and the tea party movement.

“This is a business deal, and the most important thing here is to keep our eye on the prize of diversifying Alaska’s economy and jobs,” he said.

One of the bill’s biggest challenges may have been that it originated in the Senate, where top leaders balked at supporting Gov. Sean Parnell’s call for billions in tax reductions for the oil industry, something House leaders supported.

At a press conference, House Speaker Mike Chenault once linked the two topics, suggesting the state needed more resource development and fewer tax credits.

Rep. Bill Thomas, R-Haines, linked the two topics in another manner.

He’s among legislators urging oil companies to hire more Alaskans. He took special note when Susan Bell, commissioner of the Department of Commerce and Economic Development, noted the film incentives program included tax credits for local hire.

“Interesting. We’ll have to remember that for later,” Thomas said.

Fairclough, who originally voted against the film incentives bill and questioned its renewal, said she expected to be proven right in a year or two.

“I’m very concerned that this particular credit has drawn people to Alaska that are going to highlight Alaska in a way that may not be beneficial to Alaskans,” she said.

The film incentive program doesn’t expire until fiscal year 2013, so the Legislature has plenty of time to act on renewal, Ellis said.

During the session, state officials said about $5 million in credits had so far been approved.

This is a good time to approve those credits, to send a message to the industry when other states are cutting their programs, Ellis said.

“With huge budget deficits and waning revenues, some lawmakers are taking a closer look at tax credits for filmmakers,” reported the National Conference of State Legislatures recently.

Several states have scaled back their offerings, the group said, while a couple have eliminated them altogether.